What Is A Lady Bird Deed In Florida, And How Can It Help Your Family?
One of the most common concerns for senior homeowners is how to pass that home to their heirs in a way that avoids probate and saves court and taxes for their loved ones. In Florida, one tool available for estate planners is the “Lady Bird Deed,” a unique property deed that allows a grantor to retain full use of the home during their lifetime while it transfers automatically to beneficiaries upon death.
A Lady Bird Deed in Florida is also known as an Enhanced Life Estate Deed. As legend has it, the “Lady Bird” deed got its name from “Lady Bird” Johnson, former First Lady under the Lydon Johnson Presidential administration. (The attorney who created the concept used her and the President as his primary example.)
The Lady Bird Deed carries certain advantages that a regular life estate or living trust may not have. For example, the enhanced life estate features a combination of retained control for the grantor, revocability, and simplicity for both the grantor and beneficiary.
Advantages of a Lady Bird Deed Include:
- Avoidance of Probate. When someone dies, and their estate goes to probate, the administration of the state and division of assets can take months. This leaves property and assets in limbo in ways the decedent may not have wished. The property will automatically pass upon death if you have a lady bird deed in place.
- Reduction of costs. Having a deed that automatically transfers upon death means the home can avoid going through probate or having to be sold. This reduces costs associated with probate, real estate transactions, and attorney’s fees.
- Freedom to sell, transfer, or change beneficiaries. The enhanced life estate interest in a Lady Bird deed means a person can do whatever they choose with the home – including selling the house outright or changing beneficiaries during their lifetime. The remainder beneficiary interest has no right to the property until the owner dies.
- Simplicity and ease of transfer. The automatic transfer in a Lady Bird deed reduces and cuts away the red tape and allows the home to transfer smoothly. This helps a grieving family that has other issues on their minds. It will pass by law from the life estate holder to the person holding the remainder beneficiary interest.
- A homeowner can establish a Lady Bird deed and change their minds later without legal ramifications. If they decide to adopt a different strategy with the home, they are free to do so.
A Valid Lady Bird Deed in Florida Will Include:
- A Grantor – this is the current owner of the property. They will change their ownership interest into an enhanced life estate with the remainder interest in one or more beneficiaries.
- Enhanced Life Estate interest – the enhanced life estate allows the current owner to retain control over the property and transfer the property upon death. This enhanced life estate provision is the defining feature of a Lady Bird Deed. It gives the current tenant full legal authority to sell, convey, lease, or otherwise manage or transfer the property without the beneficiary’s permission. Not all states permit this function, but Florida does.
- Remainder beneficiary – the person, people, or group that will inherit ownership of the property upon the life tenant’s death.
- Legal description – this is the legal description of the property that your county’s Register of Deeds uses to record and identify the property for sales and transfers.
- Homestead provision – if transferring to children, it is important to take advantage of Florida’s homestead law and clarify that the property shall remain the life tenant’s homestead. Using a lady bird deed will not affect one’s homestead since you are not transferring any interest at the time of creation.
A Lady Bird Deed is advantageous for several reasons and could be an excellent option for many homeowners and their families. This type of arrangement is not for everyone, however. Hence, it is important to consult with an estate planning attorney who knows Florida law and can explain this approach’s benefits and drawbacks.
The Tampa Estate Planning Attorneys at Strategic Counsel Law Group, L.C., Can Answer Your Questions About “Lady Bird” Deeds and How They Can Help You
The Tampa estate planning attorneys at Strategic Counsel Law Group, L.C., understand the issues you and your family may be concerned with and are here to listen. We don’t take a “cookie cutter” approach to estate planning and will help prepare a uniquely tailored plan to your needs and wishes. Start the conversation today by calling our attorneys at 813-286-1700 or by scheduling a consultation online.